For Beginners who don't know the real meaning of RSI RSI---RELATIVE STRENGTH INDEX
As the name says it shows the strength of a particular stock or index. More the RSI more the strength RSI above 40 indicates very little strength 50/60+ RSI stocks indicates very good strength....But RSI above 80 indicates that the stock is little overbought and may consolidate but doesn't mean it will fall... RSI below 40 stocks should never be bought...RSI below 40 is oversold but the stock might not bounce back as the strength is weak...So buying a stock with RSI above 50/60 is the best and SHORT selling below 30/40 is the best option...
RSI RANGE SHIFT STRATEGY: It's a simple swing trading strategy When RSI is falling and bounces back from 40...it is a buy for the stock once RSI is heading towards 60 It is a SHORT SELL if RSI 40 support is broken
This strategy has to be combined with PRICE ACTION to get a good RISK/REWARD ratio.
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